Talk about turning up the volume on stamp collecting. I used to collect stamps as a kid, but as the cynical marketeer I view it more as a con job – pre-pay for a service you will never use, but I have to admit that Vader envelope looks pretty cool.
I’ve been running around like crazy with back-to-back events after work. Yesterday was a meetup for author Michael Raynor, author of The Strategy Paradox
I have yet to dig into the book, but had a chance to chat with the author and he explained the premise: While the Innovator’s Dilemma explains how proper management actually defeats an organization’s ability to innovate, there is a similar phenomenon in strategic planning where the strategies that would appear most likely to be a runaway success are the same ones that can be complete failures. In the middle are lower risk strategies that have a high probability of meager returns (please keep in mind that these are my words based on about 10 minutes of discussion).
Our chat has been captured in glorious stereomonic and will be included in this Monday’s M Show, so please take a listen.
Tonight was WebInno number 11. The event continues to be a huge success, they must be pushing 300 attendees now. Although Mara’s asking me if I was going to Nantucket nearly drove me to tears (that’s another story), I did persevere long enough to check out the latest:
Strong presentations across the board. In closing I have to congratulate Christopher Penn as tomorrow he will be rolling the 500th episode of The Financial Aid Podcast.
Will Herman sent in a comment on my post bemoaning the end of the pay per click advertising (PPC) gold rush and asked if Pay per Action will replace Pay per Click. There’s been a lot of hype in the past couple of weeks and Google recently moved in that direction by allowing PPC in their content network as opposed to pay per thousand impressions (CPM).
My thoughts here are still evolving, but here’s the best I have so far:
Good question… my only answer so far is… maybe. It’s getting more complex across the board. On one hand you have the advertiser that would love pay-per-action, and on the other side the media property that would prefer to get paid per thousand impressions and leave the risk of ads being relevant or not to the advertiser. Clicks have been a happy medium, with click fraud only being a minor concern.
Paying for conversion shifts more of the risk to the media property – if my advertisers have terrible landing pages I’m not going to get anything – worse yet, they get the impact of their brand on my page for free. These types of affiliate deals are fairly common already, but because of the “free rider” branding most pubs have been very picky about who they will allow to ride side-by-side with their brand.
Most of the current deals like the one described above is a variation though – the affiliate is doing the advertising on behalf of the brand that is selling and the affiliate gets paid when they bring in deals – basically outsourcing a portion of the marketing function. I guess you could say the with a google pay-per-action campaign the marketing is now coming through the source rather than a contractor (rather than someone else coming up with a message for you, now your message goes out into uncharted waters).
I think the market will handle this – qualified leads are worth significantly more than clicks. To use the previous discussion, while I’m not willing to pay $5 for a click, I’d gladly pay $200 for a name that has been pre-qualified through 5 questions, is in the US, and is a confirmed identity with a corporate email address.
This shouldn’t be a tough sell to the media property – they can choose between getting paid a nickel for a click or $100 for a conversion. Publishers will eventually not have to sell advertising space, but rather manage it. They no longer have to worry about empty space, but rather non-performing ads. Sadly, I think this is beyond the core competence of most publishing organizations (think about this – that’s one of the benefits of AdSense now – the publisher does no work at all besides initial setup).
For the savvy publisher this would just be a matter of testing, and now that I think about it Google could arbitrage that since they already have the stats (I don’t know? Is that evil? Gambling? Insurance? All of the above?). So the bottom line is I don’t see pay per action getting big until the tools to do it are as simple as adsense – which I think could happen in as fast as 1 year if Google decides to “work the float”.
This is yet another sign that the land grab is over. The days of farming out 20,0000 keywords at a nickel a pop are over. Just as in adwords the benefits now will be driven to those who can write relevant ads that get (what we consider now to be) exceptionally high click-through rates. The creepiest part of this is that it’s all driving users to increase the level of relevance of their ads – playing into Google’s hand and wallet at the same time.
There are many hackneyed sayings about the cynics being the only true romantics. Most of them revolving around some variation of “the reason many people are cranky is because their optimism is constantly challenged by the seven deadly sins of those around them”. I’ve also been doing some reading about the cyclical nature of human attention and interest and there are many patterns that emerge. One recurring theme is the Tragedy of the Commons. The basic idea is that if there’s stuff out there for free, it’s going to get ruined. In fact, you might want to check out that article before reading on, as it’s something that you should become familiar with if you haven’t already.
The tragedy makes some bold points – without attaching economic cost, you begin to have problems. As much as it goes against our charitable nature, it’s important that things have cost attached to them, and in fact, that cost needs to be high enough to discriminate between other ways to deploy or purchase resources.
A good example – a couple of months back there was some hype about Starbucks paying 2 cents a day or some other pittance to coffee farmers. The not-so-huddled masses gathered and said they should be paying a “fair” wage. Granted, the poverty level in many countries is one of the most important problems we have to face, but throwing money at it will not solve anything. Coffee prices are low because there’s too much of it on the market, paying more for coffee nobody wants will only entice more people to grow coffee, making the situation worse.
A similar problem – standing on the side of a busy intersection with a sign asking for money can be a profitable venture. For the first time I saw two people fighting over turf by the Alewife T Station during the rush hour. I’m not saying that the homeless should be ignored, I’m saying that throwing money at them will probably not change anything for the better.
So, what got me on this rant? A post yesterday about people making death threats against other bloggers. When there’s no cost to doing business in the commons, eventually neighborhoods will get run down. There will still be many great places to spend your time, but there will also be parts of town you don’t want to be seen in.
For me, this is the end of my Golden Age of the Blogosphere.
I reached a tipping point with a number of paid search campaigns over the past month. More than one client has thrown in the towel at click prices that have increased 100x in the past year. This made me think more about relevancy – the old model was to cover as many keywords as possible. The new price points make that no longer feasible. At 5 cents a click you can deal with a 1% conversion rate. At $5 a click your expense has gone from $5 to $500 per lead (and that’s assuming a 1% conversion rate, which is well targeted, all those marginal ones down at 0.5% are now edging into $1000). Unless you are selling medical devices or airplanes it’s time to start looking at blogs, vertical publications, or just about anything else.
So does this mean that paid search has hit it’s peak? Unless newer customers come in with a higher threshold for pain than mine, there’s no more money to get…
It’s sunday, so that means The M Show will be rolling out later today. Some other interesting stuff:
I just finished reading a paper talking about applying the Long Tail to branding, rather interesting. Any blog that considers the Second Law of Thermodynamics relevant to Marketing is worth my time.
Project code name “Coffee” is scheduled to launch on Thursday if the current pace continues.
Bum Rush the Charts did crack the top 100, congrats to Christopher Penn and everyone else involved with the program. Looking forward to hearing the final numbers.
Chris Pirillo pointed me to this via twitter and then it hit me as a brain buster – until now computers could only hear, this guy has made them able to LISTEN.
I woke up this morning and found Black Lab at #99 on the charts. Bum Rush the Charts pushed an indie artist into the top 100 on iTunes – incredible!
I’m also getting to the final prep of my latest new project, Marketing Over Coffee – keep your ears open! It’s been a crazy week and I’m going to catch up on some sleep.
It’s strange how things all come together sometimes. For the past couple of days I have been listening to the audio presentations from the TED Conference (Mitch Joel – I will not stop until I have a beer with you at TED, and I don’t give a damn if it’s in 2037). Tony Robbins was speaking about what gives meaning to life and he broke it into 6 needs (a new Maslow, if you will). Four were base needs to survive, the upper two were spiritual – the need to grow and the need to give.
Instantly this focused the understanding of my fascination with Bum Rush the Charts. It’s a chance to grow and try to figure out the puzzle that is iTunes without being able to see behind the curtain. With the proceeds going towards a scholarship the effort has a higher meaning.
I also had two other threads weave together. Seth Godin made a lasting impact when I was listening to him months ago on Across the Sound. He refused to criticize a campaign because he said that at least the group was trying, the only people that deserved criticism were those who didn’t do anything, or took the safe route (he goes further to say that safe is the new risky). Since then I have made an effort to not criticize those who are brave enough to try something new. This echoed back to me today listening to Adam Curry on the DSC. It’s easy for people to complain, those are the people you don’t need to hang out with – spend your time with people who make an effort to do something.
So enough with the sermon – what have we learned? Rock is weak, the number 1 track in rock is number 5 overall, but it tails off quickly – only the top 12 or so tracks make it into the top 100 overall. Hip-Hop and Pop run the charts *groan*
Mine Again will continue to rise up in the charts. I’m going to put some chips down here. It appears that the track only moved once, it wasn’t on the chart and then everything moved around 11am Eastern. My theory is that the scoring is a 7-day moving average. Chris says that the landing page had over 10k hits, let’s say only half bought the track. I find it difficult to believe that more than 5,000 people bought Def Leppard’s Pour Some Sugar on Me during the same period (and that’s hard for me to say as I believe that could be one of the 5 greatest singles of all time). Assuming there wasn’t some kind of Def Leppard the Charts going on that I didn’t know about, we’d say it was a normal day for that track and if it did beat the bum rush there would be over 2 million iPods or more with this hot track from Hysteria on it.
I think we can safely presume that the track may actually be penalized right now for squeezing all the buys into a single day (in theory the total sales today divided by the length of the measuring cycle – i.e. if it’s 7 days we are only seeing 1/7th of the total impact as the previous 6 days are much closer to zero). Check out Christopher Penn’s latest update to see if I’ve still got the J-Funk.
Talk to you tomorrow.
Tomorrow (Thursday) is Bum Rush the Charts. Here’s the story:
A bunch of us who blog, podcast and vidcast want to show that focused, relevant content is the new king. We want to see how much impact we can have on iTunes and raise some money for a good cause at the same time.
The track to buy is called “Mine Again” by Black Lab.
As all Marketeers love stats – here are the critical ones:
On a 99 cent purchase of an RIAA artist:
– 19 cents goes to Apple
– 75 cents goes to the label
– 5 cents goes to the artist
On a 99 cent purchase of Mine Again on March 22:
– 14 cents goes to Apple
– 5 cents goes to the scholarship fund directly
– 40 cents goes to the band
– 40 cents goes to the scholarship fund via Black Lab’s donation
Click here to Bum Rush The Charts and make a charitable donation.
Here’s another special for you – I’ll be gifting the track to up to 50 subscribers to The M Show insider, the email newsletter of The M Show podcast. You can sign up on the homepage of the best business podcast.
How high with the track go? Keep your feet on the ground, and your head in the stars!
